Blockchain increases security through transparency

Security within the supply chain can be increased with blockchain technology because of its transparency. ( Photo: Shutterstock )

It’s not an app. It’s not a company. In some ways, it’s still just an emerging idea. But it’s an idea so powerful it happens to be transforming our economic systems in radical ways. Originally conceived as a way of tracking Bitcoin currency, its implications reach far beyond Bitcoin and the cryptocurrency that everyone still associates with it.

Many still wonder how it works, and more importantly, is it safe?

For starters, blockchains lower uncertainty between parties because it’s replicated, it’s secure and hard to tamper with. Blockchain is designed to store information in a way that makes it virtually impossible to add, remove or change data without being detected and authorized by other users. Some have compared blockchain technology to something like a Wikipedia page with multiple parties contributing to an open system, but that’s not quite right. With Wikipedia, the changes and alterations to the data are open to the entire public, and are often recorded for significant time periods without the requirement to validate or verify the information. By contrast, a “Block” is a permanently recorded set of data with a time stamp. The rest of the chain is between a narrow and closed network working in a peer-to-peer format. The network interacts and functions together cooperatively as a team.

For logistics and supply chain applications, it’s a game-changer. Perhaps the most important among these includes improvements of transparency and data sharing across the supply chain, better tracking of orders, reducing errors and better fraud detection. It’s no longer the future, either. It’s here and happening now.

According to Morgan Stanley’s Blockchain in Freight report, IBM has invested in blockchain technology since 2014, and forecasts a $200 plus billion potential for FS and supply chains alone. IBM also has 50-plus Developer APIs, and over 400 clients currently engaged with blockchain. Another potential winner in the blockchain space is Trimble, a leading software provider for trucking. Trimble plans to have its own private, encrypted blockchain technology to roll out in 2018. Its application projects to handle up to 500,000 transactions per week. Walmart also announced the use of blockchain technology with an emphasis on identifying the source of bad food in the supply chain. DHL is developing a direct decentralized platform to facilitate financial transactions. Maersk, in collaboration with IBM, is using the technology to track millions of ocean freight shipping containers, and streamline customs and security inspections. The blockchain empowers individuals to hold their own official records and share them directly, and acts as a notary that can always attest to the authenticity of certificates.

Clearly, blockchain technology presents huge cost saving advantages for the industry.

The new platforms also assist in reducing transaction time, duplication of documents and authentication processes among all trading partners. It allows many intermediaries in the air cargo chain, from handlers to customs, from shippers to carriers, to communicate safely, cheaply and effectively. What has not been so clear is how safe the networks will function.

So what is blockchain? It’s disrupting an industry that’s ripe for innovation. It has a lot more capacity for utilization than merely in the logistics industry, but because the industry is in need of innovation, and because the stakes are so high, it’s a perfect storm for growth projection.

To further validate the growth and economic encouragement to the technology, at least eight U.S. States have worked on bills accepting or promoting the use of blockchain technology. Several bills have already passed into law.

How fast and how widely will blockchain technology be implemented in the supply chain? No one can say for sure, but now that people see how secure it is, the future is wide open. It’s taking off in earnest and ahead of projected schedule.

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Chad Prevost

Chad is radio host and broadcast media specialist for FreightWaves.

One Comment

  1. Thanks for sharing your valuable ideas, but what is the effct in future of blockchain technology. What problem does blockchain solve.